Bank account debits tax (BADT or BAD) was an Australian

bank transaction tax A bank transaction tax is a tax levied on debit (and/or credit) entries on bank accounts. In 1989, at the Buenos Aires meetings of the International Institute of Public Finance, University of Wisconsin–Madison Professor of Economics Edgar L. ...

levied on customer withdrawals from bank accounts with a

cheque A cheque, or check (American English; see spelling differences) is a document that orders a bank (or credit union) to pay a specific amount of money from a person's account to the person in whose name the cheque has been issued. The pers ...

facility (both withdrawals made by cheque or by another means, such as

EFTPOS Electronic funds transfer at point of sale (EFTPOS; ) is an electronic payment system involving electronic funds transfers based on the use of payment cards, such as debit or credit cards, at payment terminals located at points of sale. EFTPOS t ...

). The tax was introduced by the federal government in 1982. The power to levy the tax was transferred to the states in 1990, except for

Norfolk Island Norfolk Island (, ; Norfuk: ''Norf'k Ailen'') is an external territory of Australia located in the Pacific Ocean between New Zealand and New Caledonia, directly east of Australia's Evans Head and about from Lord Howe Island. Together with ...

which did not charge it. The tax was abolished by the states on dates between 1 July 2002 and 1 July 2005 as part of the package of reforms for the introduction of the goods and services tax. The financial institutions duty was also abolished as part of this package. The tax was based on the amount withdrawn, and varied by state. The final rates were per the following table. :{, class="wikitable" , , Tas , ACT, NT,

NSW ) , nickname = , image_map = New South Wales in Australia.svg , map_caption = Location of New South Wales in AustraliaCoordinates: , subdivision_type = Country , subdivision_name = Australia , established_title = Before federation , es ...

Qld ) , nickname = Sunshine State , image_map = Queensland in Australia.svg , map_caption = Location of Queensland in Australia , subdivision_type = Country , subdivision_name = Australia , established_title = Before federation , establishe ...

,
SA,

Vic Vic (; es, Vic or Pancracio Celdrán (2004). Diccionario de topónimos españoles y sus gentilicios (5ª edición). Madrid: Espasa Calpe. p. 843. ISBN 978-84-670-3054-9. «Vic o Vich (viquense, vigitano, vigatán, ausense, ausetano, ausonense): ...

, WA , - , less than $1 , , nil , , nil , - , $1 to less than $100 , , $0.15 , , $0.15 , - , $100 to less than $500 , , $0.35 , , $0.70 , - , $500 to less than $5,000 , , $0.75 , , $1.50 , - , $5,000 to less than $10,000 , , $1.50 , , $3.00 , - , $10,000 or more , , $2.00 , , $4.00 The tax was levied according to the state where the bank account was domiciled, not where the account holder lived. A total of about $1 billion per year was being collected near the end of its full operation in 2001 (according to the Australian Bankers' Association). Since the tax applied only to cheque accounts, bank customers could choose not to have a cheque facility to avoid the tax, or could keep a separate cheque account used only when needing to write a cheque.

Bank errors

On 11 May 2005,

National Australia Bank National Australia Bank (abbreviated NAB, branded nab) is one of the four largest financial institutions in Australia (colloquially referred to as "The Big Four") in terms of market capitalisation, earnings and customers. NAB was ranked 21st-la ...

announced it had incorrectly collected bank account debits tax totalling some $10 million from 140,000 bank accounts. The bank's announcement included plans to reimburse customers for the $10 million incorrectly collected and a further $4 million in interest owed. However, since the issue may have dated back to the 31 December 1982 introduction of the tax, there were insufficient records to identify all affected customers.

Legislation

* Debits Tax Act 1982 (Commonwealth) * Debits Tax Administration Act 1982 (Commonwealth) * Debits Tax Act 1990 (New South Wales) * Debits Tax Act 1990 (Queensland) * Debits Tax Act 1990 (South Australia) * Debits Tax Act 1990 (Tasmania) * Debits Tax Act 1990 (Victoria) * Debits Tax Act 1990 (Western Australia) * Debits Tax Act 1997 (Australian Capital Territory) * Debits Tax Act 1990 (Northern Territory)

References

''Bank Account Transaction Taxes: 'FID' and 'BAD' ''
David Kehl,

Parliament of Australia The Parliament of Australia (officially the Federal Parliament, also called the Commonwealth Parliament) is the legislature, legislative branch of the government of Australia. It consists of three elements: the monarch (represented by the ...

Parliamentary Library Research Note 7 2001–02
Press release on FID abolition
by the Australian Bankers' Association
Bank account overcharging announcement

media release and

ASX Australian Securities Exchange Ltd or ASX, is an Australian public company that operates Australia's primary securities exchange, the Australian Securities Exchange (sometimes referred to outside of Australia as, or confused within Australia as ...

announcement History of taxation in Australia Banking in Australia Abolished taxes

Bank errors

Legislation

See also

References